HR & payroll glossary
What is TAN? Tax Deduction and Collection Account Number
TAN is the ten-character number an employer that deducts TDS on salary must hold and quote on each challan, quarterly statement and salary certificate.
Definition
The Tax Deduction and Collection Account Number identifies a deductor to the Income Tax Department. An employer deducting tax at source must apply for one and quote it on every TDS payment, statement and certificate. Under the Income-tax Rules, 2026 the application is Form 134 or 135, under section 397 of the Income-tax Act, 2025.
How it works
- It has ten characters: four letters, five digits and a letter.
- Each deducting branch or division may hold its own TAN, or one TAN can cover the company.
- TAN is different from PAN; quoting a PAN where a TAN is needed causes the payment to fail to match.
- Salary TDS paid under one TAN must be reported in that TAN's quarterly statement.
Why HR and payroll teams care
A wrong TAN on a challan or statement leaves tax unmatched, so employees' tax credits do not appear and they receive notices.
Example
Two offices, one company
- Mumbai office deducts salary TDS under its TAN
- Pune office has a separate TAN
- Each TAN files its own quarterly Form 138 for its employees
TAN in NeevHR
Related reading
See how NeevHR handles TAN in payroll and HR
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